MFEM - Navigating Volatility Inflation And Rising Rates

• In 2022, we have extreme uncertainty around the fundamental economic environment, the policy response, inflation and the response of policymakers.
• Although we are cautiously optimistic on the inflationary trajectory, when you look at the relatively low rate environment still, you’re still not getting paid a lot to bet against inflation at this point. We still think it makes sense to be defensive.
• We continue across portfolios to be underweight duration. The recent backup in rates, particularly on the front end of the curve, as we price in more central bank policy actions, are becoming more interesting from a valuation perspective.

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